Mortgage Insurance

Mortgage Insurance

Don’t Bank on the Bank (mortgage) Insurance

As Independent Insurance Brokers
We get you the Best Value at the Best Rate

It may be convenient, but using the bank to purchase your
mortgage insurance may cost you some crucial benefits.

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Helping you achieve your financial goals

When borrowing money from a bank for the purchase of a new home, the bank may suggest purchasing mortgage (life) insurance dedicated to paying off the loan balance. Some banks may even make it appear that this is mandatory, it is not. While insurance is a good idea, purchasing the insurance through the bank may not be the best idea.

First, the bank is the owner and the beneficiary of your policy, unlike insurance through an independent broker, so the death benefit is used to only repay the mortgage. Shouldn’t the surviving spouse be the one to know who to allocate the proceeds of the benefit?

Second, bank insurance is expensive, decreasing term insurance. As you pay down the mortgage the insurance coverage goes down but the premiums do not. With independent broker insurance, the face value of the policy is constant as are the premiums.

Third, with bank insurance, health status is verified when a claim is made. This means that even though you are paying for a product you hope to have should something happen, the bank may not pay the claim if the insured is not eligible for insurance coverage.

Fourth, if your mortgage is moved to another lender, insurance coverage ends, which is not the case with independent broker insurance.

Finally, with bank insurance you may not be eligible for continuing your insurance coverage if your health changes when your policy comes due. With independent broker insurance there is no need to re-qualify for insurance once your term is up as the policies are renewable or convertible without evidence of insurability (medicals are done upfront). Your insurance coverage cannot be cancelled so long as you continue to pay your premiums.

Check List:

  • You choose how much insurance coverage you need, rather than the bank
  • Name your own beneficiary for your insurance policy
  • Pay for a product you know will pay out in your time of need
  • Choose yourself how best to use a benefit from a claim (pay down the mortgage, pay bills, provide a monthly income)
  • Coverage cannot be cancelled as long as premiums are paid
  • Have the freedom to switch your mortgage to another lender, without jeopardizing your insurance coverage

 

Why buy expensive bank insurance that decreases in value as you pay off your mortgage?

Why name the bank as your beneficiary instead of your spouse?

Why pay premiums for a product that may not pay out when you need it most?

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